Upload
osborne-griffin
View
222
Download
0
Tags:
Embed Size (px)
Citation preview
The The AAntigua and ntigua and BBarbuda arbuda SSales ales TTaxax
ABSTABST
Not an Additional Tax but Part of the Reformed Tax System
The History of Value Added The History of Value Added Tax (VAT)Tax (VAT) France 1948France 1948 Brazil 1967Brazil 1967 Expands to 63 countries between Expands to 63 countries between
1970/801970/80 Currently 136 countries have a VATCurrently 136 countries have a VAT
The VAT todayThe VAT today
4 billion people pay VAT (70% of world 4 billion people pay VAT (70% of world population)population)
Annual VAT revenues are more than US$18 Annual VAT revenues are more than US$18 trilliontrillion
25% of annual total tax revenue 25% of annual total tax revenue VAT has replaced retail sales and other taxesVAT has replaced retail sales and other taxes Denmark (25%)Denmark (25%) Nigeria, Panama, Taiwan, Singapore (5%)Nigeria, Panama, Taiwan, Singapore (5%)
VAT presence in the VAT presence in the CaribbeanCaribbean In operationIn operation– Barbados, Dominican Republic, Barbados, Dominican Republic,
Haiti, Jamaica, and Trinidad & Haiti, Jamaica, and Trinidad & TobagoTobago
Being introducedBeing introduced– Dominica, Antigua and Dominica, Antigua and
Barbuda, Guyana, St. Lucia and Barbuda, Guyana, St. Lucia and St. Vincent and the GrenadinesSt. Vincent and the Grenadines
Being re-introducedBeing re-introduced– Belize and GrenadaBelize and Grenada
The ABSTThe ABST
A Value Added Tax-type consumption taxA Value Added Tax-type consumption tax
A broad-based tax onA broad-based tax on consumptionconsumption
A tax on supplies (goods and services)A tax on supplies (goods and services)
A multi-stage transaction taxA multi-stage transaction tax
Will begin with a high threshold Will begin with a high threshold
Only a small number of registrants initiallyOnly a small number of registrants initially
Registrants and Customs will charge the ABST Registrants and Customs will charge the ABST on behalf of the government on behalf of the government
Registrants will off-set ABST paid on purchases Registrants will off-set ABST paid on purchases and other costs against ABST charged on salesand other costs against ABST charged on sales
Why ABSTWhy ABSTOECS Reform Commission recommended a VAT OECS Reform Commission recommended a VAT for member countries as part of general tax for member countries as part of general tax reform programme reform programme
Consistent with international and WTO rulings Consistent with international and WTO rulings regarding the elimination of consumption taxes regarding the elimination of consumption taxes (Customs service tax?) (Customs service tax?)
Universal application (everyone pays)Universal application (everyone pays)
Introduction of the ABST is a good opportunity to Introduction of the ABST is a good opportunity to revamp Inland Revenue and Customs revamp Inland Revenue and Customs administrationsadministrations
Not a New Tax but Part of a Reformed Tax SystemNot a New Tax but Part of a Reformed Tax System
Economic ImplicationsEconomic Implications
Expected to deliver long term economic Expected to deliver long term economic improvements improvements
Will help facilitate Antigua and Barbuda’s Will help facilitate Antigua and Barbuda’s transition to the FTAA transition to the FTAA
Replacement of multi rated consumption tax Replacement of multi rated consumption tax with single rated tax on domestic and imported with single rated tax on domestic and imported goodsgoods
Most prices for goods should remain relatively Most prices for goods should remain relatively stablestable
Services will be subject to ABSTServices will be subject to ABST
ABST Revenue Impact (annual)ABST Revenue Impact (annual)
The largest suppliersThe largest suppliersLarge turnover Large turnover A lower threshold of for hotels and A lower threshold of for hotels and restaurants restaurants Revenue raised $157mRevenue raised $157mTaxes repealed Taxes repealed $120m$120m
Net ABST Net ABST RevenueRevenue $37m$37m
What will be subject to ABST?What will be subject to ABST?
The Government proposes an ABST on:The Government proposes an ABST on:
Imports into Antigua and Barbuda; andImports into Antigua and Barbuda; and
Most goods & services supplied in Antigua Most goods & services supplied in Antigua and Barbudaand Barbuda
Goods: Goods: physical objects such as furniture, physical objects such as furniture, clothing, appliances and including food clothing, appliances and including food products. products.
Services: Services: services such as those provided by services such as those provided by
lawyers, architects, plumbers, and mechanicslawyers, architects, plumbers, and mechanics
Taxes to be Replaced
Consumption tax
Telecommunications tax
Restaurant and catering services tax
Hotel (bed-night) tax
Hotel guest tax
Hotel guest levy
Supplies not Subject to ABSTSupplies not Subject to ABST
Zero rated supplies (exempt with credit)Zero rated supplies (exempt with credit)
No ABST on sales but refunds available for No ABST on sales but refunds available for ABST paid on inputsABST paid on inputs
Usually exports Usually exports
Exempt supplies (exempt without credit)Exempt supplies (exempt without credit)
No ABST on sales but no refunds of ABST No ABST on sales but no refunds of ABST paid on inputspaid on inputs
Supplies not subject to ABSTSupplies not subject to ABSTItems included in the basic basket of goods
Medical services including dental, optical and veterinary services
Drugs and medicines sold in pharmacies and medical centres
Services provided in nursing homes for persons who need permanent care
Educational services including both private and state provided education
Residential rents and sale of residential real property
Supplies not subject to ABSTSupplies not subject to ABST
The basic charge for water and electricity Textbooks approved by the Ministry of Education Day care servicesTransportation of passengers by land or by ferry between Antigua and BarbudaFinancial services International transport servicesThe services of funeral directors and undertakers
Basic Basket of GoodsBasic Basket of Goods
Macaroni Macaroni Chicken Chicken MackerelMackerel
Salt FishSalt Fish OatsOats Local CatchLocal Catch
CheeseCheese Orange JuiceOrange Juice Cocoa Cocoa
ToothpasteToothpaste Soap PowderSoap Powder Toilet PaperToilet Paper
CrackersCrackers SodaSoda EggsEggs
Baby WipesBaby Wipes Ling FishLing Fish Infant FormulaInfant Formula
Basic Basket of GoodsBasic Basket of Goods
Peas & Beans Peas & Beans Tea Tea Red HerringRed Herring
TunaTuna CerealCereal BiscuitsBiscuits
Luncheon MeatLuncheon Meat Black PepperBlack Pepper Insecticides Insecticides
Mosquito CoilMosquito Coil MaltMalt CornmealCornmeal
RiceRice FlourFlour SugarSugar
MilkMilk SaltSalt ButterButter
Basic Basket of GoodsBasic Basket of Goods
Margarine Margarine Corn MealCorn Meal Refined Edible OilRefined Edible Oil
TunaTuna CerealCereal BiscuitsBiscuits
SoapSoap Petroleum Petroleum ProductsProducts
Pharmaceutical Pharmaceutical Goods Goods
Effect of ABST on PricesEffect of ABST on PricesBasic basket of goods will not be subject to Basic basket of goods will not be subject to ABSTABSTABST rate will be around 15%ABST rate will be around 15%Current rate for consumption tax on most Current rate for consumption tax on most goods is between 5% and 50%goods is between 5% and 50%Prices for many goods should remain relatively Prices for many goods should remain relatively stable stable Consumption tax is hiddenConsumption tax is hiddenABST is visible ABST is visible Prices for taxable services should rise slightly Prices for taxable services should rise slightly with ABSTwith ABSTPrices quoted will be ABST inclusivePrices quoted will be ABST inclusive
Who Will be Registered?Who Will be Registered?
Business with the largest annual turnover Business with the largest annual turnover (supply of both goods and services)(supply of both goods and services)Many (not all) hotels and restaurantsMany (not all) hotels and restaurantsAdministrative capacity of IRD continues Administrative capacity of IRD continues to increase and registration threshold will to increase and registration threshold will be lowered to include most businessesbe lowered to include most businessesRemember registered businesses will Remember registered businesses will charge the ABST to consumers and charge the ABST to consumers and recover the ABST they pay in the recover the ABST they pay in the production of the goods and servicesproduction of the goods and services
Collection & returnsCollection & returns
Monthly ABST returnsMonthly ABST returns
ABST payable = ABST charged – ABST paidABST payable = ABST charged – ABST paid
Net amount is paid to the Commissioner Net amount is paid to the Commissioner IRDIRD
** No credits for input tax unless registrant has No credits for input tax unless registrant has an ABST invoice issued by the supplieran ABST invoice issued by the supplier
ABST payable on imports is paid to the ABST payable on imports is paid to the Comptroller of Customs at time of importComptroller of Customs at time of import
Documentation RequirementsDocumentation Requirements
A registered supplier will be required to:A registered supplier will be required to:
display ABST registration certificate at places of businessdisplay ABST registration certificate at places of business
issue ABST invoices for taxable supplies to other issue ABST invoices for taxable supplies to other
registered personsregistered persons
issue sales receipts showing ABST paid on taxable issue sales receipts showing ABST paid on taxable
supplies to unregistered personssupplies to unregistered persons
advertise prices as ABST-inclusive advertise prices as ABST-inclusive
final price will break down original price + ABST to equal final price will break down original price + ABST to equal
final price final price
Registered vs Non Registered Registered vs Non Registered PricesPrices
Registered will charge ABSTRegistered will charge ABST
Non Registered will not charge ABSTNon Registered will not charge ABST
Registered will receive credit for ABST Registered will receive credit for ABST paidpaid
Non Registered will not receive creditNon Registered will not receive credit
Registered can negotiate better pricesRegistered can negotiate better prices
Historically registered price per item is Historically registered price per item is similar to non registeredsimilar to non registered
ABST Payments/RefundsABST Payments/Refunds
Tax period is one calendar monthTax period is one calendar month
Net ABST payable 21 days after tax periodNet ABST payable 21 days after tax period
ABST on imports payable at time of import ABST on imports payable at time of import to the Comptroller of Customsto the Comptroller of Customs
Negative balances will be refundable if an Negative balances will be refundable if an amount remains after offsetting against amount remains after offsetting against next 6 tax periodsnext 6 tax periods
Exporters can claim refunds without Exporters can claim refunds without carrying forward into future monthscarrying forward into future months
Who will pay the ABST?Who will pay the ABST?
The ABST will be The ABST will be paid by paid by
consumers… consumers…
not by suppliers!!!not by suppliers!!!
Decisions Under ConsiderationDecisions Under ConsiderationRegistration thresholdRegistration threshold
ABST rateABST rate
Implementation dateImplementation date
Transition rulesTransition rules
Zero rated supplies (exempt with credit-Zero rated supplies (exempt with credit-exporters)exporters)
No ABST on sales but refunds available for ABST No ABST on sales but refunds available for ABST paid on inputs paid on inputs
Exempt supplies (exempt without credit)Exempt supplies (exempt without credit)
No ABST on sales but no refunds of ABST paid on No ABST on sales but no refunds of ABST paid on inputsinputs
Lead up to ABST ImplementationLead up to ABST ImplementationLegislation amended, finalized and passed Legislation amended, finalized and passed IRD will assist in registration processIRD will assist in registration process
Identification of registrantsIdentification of registrantsCompletion of registration forms Completion of registration forms Delivery of registration certificatesDelivery of registration certificates
IRD will continue the education campaignIRD will continue the education campaignPamphlets and brochures to be issued shortlyPamphlets and brochures to be issued shortly
Registrants should run down inventory to avoid (as Registrants should run down inventory to avoid (as much as possible) the application of consumption tax much as possible) the application of consumption tax and ABST to supplies in post implementation periodand ABST to supplies in post implementation periodPrices must be advertised as “ABST” inclusivePrices must be advertised as “ABST” inclusiveCash registers re-programmed to break down ABST as Cash registers re-programmed to break down ABST as part of the pricepart of the priceMaintain a controlled supply of ABST invoices for sales Maintain a controlled supply of ABST invoices for sales to registrants to registrants
Concluding RemarksConcluding RemarksABST White Paper and proposed draft legislation launched September 16White paper, legislation and ABST presentations available on antigua.ab.gov.agConsultation sessions will continueImplementation plan developed and executed in other jurisdictions and is being used as foundation for ABST introductionLocal resources for implementation have been made availableInternational/regional assistance has been made available (technical and IT)Adequate lead time to ensure successful implementation